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News Room

To reach a member of the corporate communications department directly, members of the press are invited to call either (717) 975-5718 or (717) 975-5713. You can also find recent Rite Aid press releases below.

Rite Aid Reports Net Income of $41.4 Million and Adjusted EBITDA of $282.6 Million for First Quarter Fiscal 2015

• First Quarter Net Income of $41.4 Million and Net Income per Diluted Share of $0.04, Compared to Prior Year's First Quarter Net Income of $89.7 Million and Net Income per Diluted Share of $0.09

• First Quarter Adjusted EBITDA of $282.6 Million Compared to Adjusted EBITDA of $344.8 Million in Prior First Quarter

• Rite Aid Confirms Outlook for Fiscal 2015

CAMP HILL, Pa. (June 19, 2014) - Rite Aid Corporation (NYSE: RAD) today reported operating results for its fiscal first quarter ended May 31, 2014. The company reported revenues of $6.5 billion, net income of $41.4 million or $0.04 per diluted share, and Adjusted EBITDA of $282.6 million, or 4.4 percent of revenues.

"In the first quarter, we delivered a strong store operating performance, highlighted by increases in same-store sales and same-store prescription count," said Rite Aid Chairman and CEO John Standley. "As we work through managing the higher-than-expected drug costs and reimbursement rate pressure that affected our financial results for the quarter, we remain focused on executing our strategy to expand our health care offering and transform Rite Aid into a growing retail health care company."

First Quarter Summary

Revenues for the quarter were $6.5 billion versus revenues of $6.3 billion in the prior year's first quarter. Revenues increased 2.7 percent primarily as a result of an increase in pharmacy same store sales.

Same store sales for the quarter increased 3.1 percent over the prior year. Front-end same store sales were flat compared to the prior-year period while pharmacy same store sales increased 4.6 percent. Pharmacy sales included an approximate 143 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 2.3 percent over the prior year period. Prescription sales accounted for 68.4 percent of total drugstore sales, and third party prescription revenue was 97.4 percent of pharmacy sales.

Net income was $41.4 million or $0.04 per diluted share compared to last year's first quarter net income of $89.7 million or $0.09 per diluted share. The decline in net income resulted primarily from a decrease in Adjusted EBITDA and higher income tax expense, partially offset by lower interest expense and a lower LIFO charge.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $282.6 million or 4.4 percent of revenues for the first quarter compared to $344.8 million or 5.5 percent of revenues for the like period last year. The decrease in Adjusted EBITDA was driven by a reduction in pharmacy gross profit due to lower reimbursement rates that were not offset with reductions in generic costs, as well as higher salary and payroll related expenses.

In the first quarter, the company relocated 3 stores, remodeled 105 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,325. The company also acquired 1 store and closed 7 stores, resulting in a total store count of 4,581 at the end of the first quarter.

Rite Aid Confirms Fiscal 2015 Guidance

Rite Aid has confirmed its fiscal 2015 guidance, which was updated on June 5, 2014. Sales are expected to be between $26.0 billion and $26.5 billion and same store sales to range from an increase of 2.50 percent to an increase of 4.50 percent over fiscal 2014. Adjusted EBITDA (which is reconciled to net income on the attached table) guidance is expected to be between $1.275 billion and $1.350 billion and net income is expected to be between $298.0 million and $408.0 million or income per diluted share of $0.30 to $0.40. Capital expenditures are expected to be approximately $525 million.

Conference Call Broadcast

Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be simulcast via the internet and can be accessed through the websites www.riteaid.com in the conference call section of investor information and www.StreetEvents.com. Slides related to materials discussed on the call will be available on both sites. A playback of the call will be available on both sites starting at 12 p.m. Eastern Time today. A playback of the call will also be available by telephone beginning at 12 p.m. Eastern Time today until 11:59 p.m. Eastern Time on June 21, 2014. The playback number is 1-855-859-2056 from within the U.S. and Canada or 1-404-537-3406 from outside the U.S. and Canada with the eight-digit reservation number 55899846.

Rite Aid is one of the nation's leading drugstore chains with 4,581 stores in 31 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through Rite Aid's website at www.riteaid.com.

Statements, including guidance, in this release that are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements, general economic, market and competitive conditions, our ability to improve the operating performance of our stores in accordance with our long term strategy, the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order, our ability to manage expenses and our investments in working capital, outcomes of legal and regulatory matters and changes in legislation or regulations, including healthcare reform. These and other risks, assumptions and uncertainties are described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Rite Aid expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

See the attached table for a reconciliation of a non-GAAP financial measure, Adjusted EBITDA to net income, the most comparable GAAP financial measure. We define Adjusted EBITDA as net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, sale of assets and investments and revenue deferrals related to our customer loyalty program).